Tag Archives: poverty

Challenging the view that Russians are ‘passive’.

uncollected rubbish

uncollected rubbish from a designated municipal site.

 

In a previous post I talked about the phrase: ‘people are Russia’s replacement oil’ as representing a new extractive shift to harvesting economic rents in more intensively from ordinary people. In this post I want to talk about liberal pundits’ interpretation of this turn of events. A much truncated version of what I wrote below was part of a short piece for Ridl.io

But before that just a quick recap on the reality of ‘making ends meet’ for many Russians that I talked about previously. Ordinary people are suffering from a decade-long decline in their living standards putting them in a position of extreme want. Published average incomes may look survivable, but the reality is that, like in other unequal countries, such statistics are misleading not least because of the distorting effect of a small number of very high incomes. In 2018 average gross wages were 40000 rubles a month or $560. Whether this figure is fiddled or not, in any case it ignores the large effect of lower informal (undeclared) incomes, and the imbalance between big city state company employment and the rest.  Independent polling indicates that the ‘real’ average pay was less than 20000 rubles ($305). $300 is not even a subsistence wage. Even adding to it a lower secondary wage, a family is left virtually nothing for clothing, medicines, travel or spending on children. When trying to measure relative poverty a robust measure is how much a family spends on food and other essentials. The open acknowledgement of the extreme poverty in which many Russians life can be seen in political events like the strange passing of a law allowing Russians to collect fallen trees, ‘for their own needs’.

Influential independent political observers like Valerii Solovei and Vladislav Inozemtsev draw pessimistic conclusions about the ‘extractive turn’. Mostly they view their fellow citizens as passive and lacking any agency, despite the obvious evidence to the contrary – the massive informal economy that sustains livelihoods and habitability above the bare subsistence level and is seriously disruptive to the state. Solovei paints a vivid picture of Russians as passive sponges to be wrung dry in any way possible by an emboldened state – where can people hide from taxes on fuel and cigarettes? (I guess you can anticipate my answer to him – in both cases it’s in the interstices of the informal economy). To be fair to him, he at least strikes a warning note: history shows that eventually people get fed up and social strife is the result. However, his remedy is predictably unimaginative, a bourgeois democratic revolution (without any messy involvement of ordinary people) such as what ‘could have been’ in 2011-12. But how realistic is political change without the engagement of people beyond metropolises? And how would a bourgeois democracy he envisage address the enormous structural inequalities and imbalances Russia faces? Doesn’t this approach just reproduce a ‘two Russias’ perspective so criticized by other observers such as Ilya Matveev? We can see traces of this stigmatizing perspective everywhere: the assumption that a ‘lack of culture’ or an ‘authoritarian personality’ prevents the ‘other’ Russians from seeing the light. On the latter, Carine Clement has recently taken this idea to task. In particular, she rejects the ‘mythical apoliticism of Russians’ and asks the question – if Russians’ ‘authoritarian’ thinking includes a strong element of critique of the existing social order, then to what degree is it really authoritarian?

Inozemstev’s approach is more interesting. He starts with the notion of popular disenchantment and elite indifference, but then links this to a more general pessimism.  Noting that the ‘new oil’ trope indicates people have awareness of how costly the elites are to them he despairs that ‘the authorities realise quite how broken the Russian population’s willingness to resist really is, from mass protests to even small-scale acts of dissent.’ Does this view make the mistake that only ‘open’ protest is a mark of resistance? Elsewhere Inozemstev actually hints at what is in plain sight: the informal economy as a bulwark against complete penury for many. He notes that even the Russian government openly acknowledges that 38 million people’s work and income is opaque at best to the state. I agree with him that most Russians want to hold down a legitimate employment in the formal economy. However, given such pessimism, even this is increasingly questioned by some of the already most vulnerable. The qualifying period for an old age pension will soon increase from 6 to 15 years, the social rights that accrue to a formally employed person are losing their value due to the erosion of the health system in general.  All in all Inozemstev proposes some incremental reforms that can be characterised as too little too late (tax free allowances on low incomes, assistance schemes like food stamps), which are regressive (increasing VAT) or even defeatist (corruption should be limited to the resource sector). Overall it looks like a kind a pale Fabianism with little scope for taking root.

In his latest piece Inozemstev is closer to some of the points I make in my previous post – detailing what the increasing in indirect taxation will mean to ordinary people – a real rise of around 10% in petrol costs and the real fall in incomes since 2008. Interestingly, given the ongoing ‘rubbish disposal’ protests, he points to the very large increase in household bills for waste disposal. This increase – a doubling has not gone unnoticed by ordinary people and they are up in arms about it – especially in places like the town I study which has been repeatedly the victim of fly-tipping of Moscow rubbish and which recently saw its head of the council’s environmental services jailed for taking bribes to allow such tipping.

Ekaterina Shulman uses the questionable assumptions and methodology of the World Values Survey data to address the topic of ‘turning the screws’ on ordinary people. She first argues that a shift in Russian values from ‘superatomisation’ characteristic of the 1990s to ‘conservative’ is somewhat positive as it facilitates collective action and sociality. A notable effect is the strengthening of weak ties and broadening of the scale of interpersonal trust especially among the young and dynamic. On the other hand, she sees in Russia the continuing legacy of totalitarianism: ‘secular, atomised society’ that produces the lonely distrustful individual with atrophied social skills.  Homo soveticus is very much still with us in her view. Consequently, she greets the shift in public opinion from ‘political security’ to ‘social security’ with some surprise (in reality this aspect of public opinion has always been there).

The beef I have with approaches like these is that the ordinary Russians who daily make decisions about how to live are presented as an undifferentiated mass – suffering from ‘learned helplessness’ (a phrase used by Ekaterina Shulman but also by Carine Clement) or as an unruly source of social unrest – the word ‘revolt’ (bunt) is reserved for them. At worst this ‘by-the-numbers’ approach gives the impression that ‘we’, the addressed middle-class audience of these pundits, should fear the ‘other’ Russia.  Solutions presented ring hollow – they are either a form of gradualism or legalism (vote, even if the field is rigged; use your right to agitate against a bad candidate; if only we just adhered to the Constitution; wait for those nostalgic old people to die). In my final post on this topic, I’ll make use of James Scott’s ideas of infrapolitics to talk more about everyday forms of resistance to the extractive turn.

 

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People as the New Oil. Or, ‘как жить дальше’ in Russia? Part I

Savelii Kramarov - 'I have more than thirty half-litres of vodka left to live on'

Savelii Kramarov in a satirical sketch on the cost of living in 1971. It has become a viral meme in the last year.

Phrases on the variation: ‘people are Russia’s replacement oil’ represent a new extractive and punitive turn in domestic politics, a shift to harvesting economic rents in more intensive ways focused on the daily doings of ordinary Russians. The interpretation goes like this: consistent oil prices over $70 – not seen since 2014 – are needed to maintain Russia’s state budget. After four years of expensive foreign policy adventures and a longer term lack of progress in creating a diversified economy at home, the government has resorted to ‘farming’ the ordinary population in earnest. This is the corollary of the ‘intense struggle access to budget money’ among the elite since 2016 that [paywall] Svetlana Barsukova details. Since most Russians have seen stagnating income levels for the last decade, and witness a noticeable deterioration in state-provision in general (in health and education and importantly the entitlements connected to them – these were the top ‘concerns’ of Russians in 2018), they can’t help but feel acute injustice at the sudden zeal for extracting fines and increasing taxes on unavoidable expenses like transport and utilities, even non-existent land holdings.

While the increase in pension age gets a lot of attention, it is worth mentioning what are more pressing issues, like the price of petrol and the raise in VAT from 18 to 20 percent, and not least inflation on staples, which is likely understated by a factor of three in official statistics. Indirect taxes hit the poorest most, and VAT is levied on utility bills, which already take up around half the income of a person on the ‘minimal income’ ($170) and are now adjusted more frequently for inflation. A second issue is largely untaxed income from self-employment which cuts across classes, from nannies and tutors to taxi drivers and  tradesmen. The government declaring ‘war on the nannies’ was a recent headline. However, most people see these incomes as topping up their meagre primary incomes and interpret the state’s renewed interest in personal taxation as profoundly unjust. Third is the more general ratcheting up of the punitive tax potential of fines on motorists, late payers of utilities, and other minor law breakers. Russian roads are densely covered by enforcement cameras in comparison to most European countries.  Moscow Region alone quadrupled its count in 2018 with 1300 cameras garnering $150m in fines (this is as many active cameras as in the whole of the UK).  400 more are on the way in Moscow in 2019. But the most telling indicator for me was a national park suddenly deciding in 2017 levy a ‘user fee’ of 400 rubles a year from hikers, anglers and even villagers whose abodes happen to lie within the park, the only interest shown in the park by the ministry of natural resources since 1995. It is as if suddenly a player in the ministry decided that previous milking of the parks (through lumber harvesting and guided tours) was now insufficient.

Therefore it is of no surprise to me that a recent Levada poll showed that while Russians’ pessimism is not as bad as it was even as recently as 2013, 46% of Russians cannot plan for even the immediate future. This was published at the same time as another poll that saw presidential ratings fall back to below 2014 levels. Furthermore, the unpopularity of the government and the Prime Minister is as high as it has ever been in the post-2000 world (a record high for the Prime Minister). Perhaps more importantly, for the first time since 2013 more surveyed people respond that the country is ‘moving in the wrong direction’ than the right one (45% versus 42%).

 

Making impossible ends meet

Bear with me here but it’s really unavoidable that we dig down into the reality of existence for the majority of Russians – poorly paid and already highly taxed before these changes. Indeed, it’s bordering on the irresponsible that the ‘human face’ of working poverty is largely absent from much discussion (which I’ll discuss in the follow-up post). To do this, let’s look at a portrait based on a real research participant I have worked with for the last ten years.

‘Dima’ worked as a loader in a brick factory in his small industrial town for the last ten years, but there his wage was static and never rose above 18,000 rubles a month. His wife works in a food shop part time and takes home 8000 rb. They have a pre-school-age child. The household income was recently therefore less than $400 a month (26,000 rb). Dima thought he’d got lucky, in 2018 he got a job at the Samsung washing machine assembly, on the road between Moscow and Kaluga. This gave him 24,000 rb a month, a 30% pay increase. However, he needed to use a car to commute to work, the costs swallowing a lot of the wage increase. With petrol going up, now he’s earning less than he used to. Before the new tax increases come into effect these were the outgoings of the family: 7000 on utilities, and 15,000 on food, which is skimping on all but the essentials. The family relies on relatives who work a garden plot for fresh fruit and vegetables, as well as jars of preserves in the winter. 5000 a month goes on petrol, just to get to work and back (there are better paid jobs, but they’re further afield). That’s already 27,000 gone, not accounting for clothes, medicine, other motoring costs, or anything for the child. What’s left is 5000 rb – or $75.

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When trying to measure relative poverty a robust measure is how much a family spends on food and other essentials. In the bitter current debate on how to quantify poverty, a frequently cited level is an income of least 8 dollars a day to maintain survival, and at least 15 dollars for any kind of dignified existence (especially in a ‘middle’ income country). It’s interesting to note that these two figures map closely the lower and upper range of blue collar wages a man like Dima can expect to earn. These kind of figures are criticised for not taking into account local prices (purchasing power), but as you can see, while wages are very low, living costs are relatively high and even bear comparison with many EU countries.

Just to take the example of the occasional treat of eating fast food, an example that resonates because of the supposed utility of the BigMac Index, for Dima to treat his child to a Happy Meal once a month will cost him more in dollar terms than either the UK or US! Indeed it will cost him 5% of his disposable income for the whole month. [And I can’t resist the personal aside here: my own family of four cooks its own meals and drinks little alcohol. When in Russia we make local-style meals. But our outgoings on food are significantly higher in Russia than in W. Europe]. A more ‘traditional’ measure of one’s finances could be in vodka ‘halflitres’.  Dima can afford 18 bottles of vodka with his 5000 rubles. In the classic routine of Savelii Kramarov from 1971, he complains of only having 30 bottles a month left over after all his expenses! Our real Russia example shows how even with two earners and only one child, no kind of dignified existence is possible. And that is before the significant increases expected in 2019. I often put it like this, Russia is a ‘middle income country without middle-incomes’. And of course Dima is substantially better off than pensioners or the many in much lower-paid work.

In the next post I will try to unpack some of the conclusions observers like Valerii Solovei and Vladislav Inozemtsev draw about what I will call the ‘extractive turn’. Overall they reveal a deep pessimism about alternative futures. Most of all though they continue to view their own countrymen as passive and lacking any agency (beyond a destructive ‘buntovat’ mentality), despite the obvious evidence to the contrary – the massive informal economy that sustains livelihoods and habitability above the bare subsistence level.